Many older adults spend more time shopping around for the best deals on groceries and gasoline than they do for their Medicare plan, reports a new survey.
As a result, they could be losing out on potential savings for prescription drugs, insurance copayments, and other out-of-pocket medical expenses.
These statistics come from WellCare’s “The Cost of Complacency” report, a survey of more than 1,000 Medicare-eligible people in the United States age 65 and over.
The survey found that only 33 percent of older adults shopped around for the best deal on their Medicare plan.
Compare this to the 54 percent of older adults who looked for better deals on groceries, or the more than 40 percent who comparison shopped for home or car insurance, gasoline, cable or internet plans, or travel expenses.
The reasons for reluctance
For anyone who has suffered through choosing a health insurance plan, the reluctance of older adults to shop around is not surprising.
“The process of signing up for any kind of benefit that appears to be complicated on the surface — and actually is complicated — is a fear factor and anxiety factor for seniors,” Sally Greenberg, executive director of the National Consumers League, told Healthline.
Greenberg has teamed up with WellCare to encourage older adults to spend more time reviewing their Medicare coverage.
However, even when older adults shop around, they don’t always select the best plan.
A study published earlier this year in the American Economic Review found that seniors often don’t choose Medicare Part D plans that save them the most money.
Study author Jason Abaluck said that one reason older adults don’t shop around for Part D coverage is inertia — people just stick with the same plan year after year.
But even those who switch don’t always make the best decisions.
Abaluck gave the example of people paying extra for “doughnut hole” coverage. This covers the cost of prescription drugs when you reach the temporary limit on what the Part D plan will cover.
Not everyone, though, will enter this coverage gap, so paying more may not save people money in the long run.
Types of Medicare plans
The first step to choosing the best Medicare plan for your situation is understanding what those plans are.
You have the option of choosing either traditional Medicare or Medicare Advantage.
There are other types of health plans as well. On top of this, you can add prescription drug coverage or supplemental insurance.
Traditional Medicare (Parts A and B). Part A covers hospital stays. Part B covers other medical care, including doctor’s visits, outpatient care, lab tests, home healthcare, and some preventive services. Part B only covers a limited number of prescription drugs.
Medicare Advantage (Part C). This health plan is offered by private companies that contract with Medicare to provide the benefits of Parts A and B. There are many types of Medicare Advantage plans. They cover most Medicare services. Most plans also offer prescription drug benefits.
Medicare prescription drug coverage (Part D). This optional prescription drug coverage is available to everyone with Medicare for an additional fee. These plans are offered by Medicare-approved companies.
Supplemental coverage (Medigap). These plans are offered by private companies to cover things that traditional Medicare doesn’t cover, such as insurance copayments, coinsurance, and deductibles.
Tips for Medicare plan shopping
You only have two months to shop for a new Medicare plan — between October 15 and December 7.
During this time, current enrollees can switch from traditional Medicare to Medicare Advantage, or switch between Part D prescription drug plans.
New coverage starts January 1.
Even if you’re happy with your current plan, you may still save money by shopping around.
“Coverage that was available last year under your current plan may not be available this year,” said Greenberg. “Or another plan may be offering more generous coverage in some of the diagnostic, hearing, or vision testing.”
Also, your own health needs — such as prescription drugs, hearing aids, and dental procedures — may have changed since the last open enrollment.
So you’re better off taking the time to review your health needs and insurance options.
“The advice that I’ve gotten from experts is definitely take a look and see. It’s possible that you might not find a better option. But many times you can save hundreds — possibly thousands — of dollars by shopping around,” said Rachel Sheedy, editor of Kiplinger’s Retirement Report, who has written about shopping around for a Medicare plan.
Sheedy said that before you comparison shop, take a look at your current plan’s Annual Notice of Change, which should have shown up in your mailbox around the end of September.
In particular, look to see if the prescription drugs that you’re currently taking are still covered by your plan and if the copays for those drugs have gone up.
There are many resources available to help you find the best plan for your health needs.
The Medicare Plan Finder on the Medicare website is a good place to start. After you enter your zip code and medications, the tool will provide you with the total cost for plans in your area, including premiums and out-of-pocket drug costs.
This tool is used by state health insurance assistance programs, or SHIPs, which offer customized help over the phone or in person.
“SHIPs can’t tell you what to do,” Sheedy told Healthline, “but they can explain all the options that you have available in your area.”
This resource is free, so you will want to contact them early.
MedicareNewsWatch.com is another resource for comparing plans, although this one focuses on Medicare Advantage.
One thing to keep in mind is that you don’t have to sign up for the same plan as your spouse.
“With married couples, each spouse doesn’t necessarily have the same health situation,” said Sheedy. “So it’s important to shop separately.”
If you are considering Medicare Advantage, you will also need to look at the provider network for each plan, which may not include your current doctors.
“If you are tied to specific doctors, you want to make sure they’ll be covered by that plan,” said Sheedy.
The National Consumers League also has tips on choosing a Medicare plan that’s right for you.
Although the December 7 deadline is coming up quickly, there’s still time to shop around.
But just like taxes, don’t expect to be able to rush through choosing a Medicare plan for next year.
“This is not something you want to do quickly,” said Greenberg. “You want to spend the necessary time, because the savings can really add up.”